The State Bank of Vietnam (SBV) has required credit institutions and branches of foreign banks in the country to reduce the cash withdrawal limit at their automatic teller machines (ATM) for transactions made in late-night hours.

In a written request issued last week, the SBV asked the lenders to lower the limit for ATM withdrawals between 11:00 pm and 5:00 am.

While the central bank kept the reason behind the request undisclosed, the specific time frame gives a hint of what the move is meant to be.

With the time period from 11:00 pm to 5:00 am of the next day widely known as the ‘golden time’ for ATM theft, the SBV’s move is believed to be meant to minimize risks for the banks and their clients.

Thieves love night-time

In the year to date, several Vietnamese banks have had trouble dealing with card data theft and ‘skimming’, a crime of illegally collecting data from the magnetic stripe of a credit, debit or ATM card, especially at night.

The thief can procure a victim's card number using basic methods, such as photocopying receipts, or more advanced tactics such as using a small electronic device, also known as a skimmer, to swipe and store hundreds of victims' card numbers.

In Vietnam, instances of skimming have been reported where users unknowingly passed their card through ATM card reader slots equipped with the criminals’ skimmers.

In April this year, about 400 debit accounts of Vietnamese lender Agribank were compromised overnight.

Another reason for thieves to commit their crime during the 11:00 pm - 5:00 am period is that they can quickly use up the withdrawal limits for two days in a few minutes.

The current daily limit on ATM withdrawals in Vietnam ranges from VND20 million (US$860) to VND100 million ($4,300), depending on the regulations of different banks.

The thieves, in the ‘golden time’, thus can double the stolen amount of money to VND40-200 million ($1,720-8,600) by making transactions near midnight and wait until the withdrawal limit is reset when the new day comes.

As this is also bedtime, victims may fail to know their bank accounts are hacked as the SMS notifications will be sent while they are sleeping.

Long-term solution

A Sacombank leadertold Tuoi Tre (Youth) newspaper that he supported the request of the state bank.

According to the leader, Sacombank has applied different withdrawal limits to different types of cards at night for about a year.

Accordingly, an ATM cardholder can only withdraw a maximum of about VND10 million ($430) at night, while the limit for owners of international chip card accounts is VND20 million.

Sacombank cardholders are also limited to no more than three times of cash withdrawal per night.

"In other countries, ATM withdrawal limits are very low, even during the daytime,” the leader said.

“Meanwhile, the high limit of withdrawals, currently applicable at night in Vietnam, is an attractive loophole for card criminals to take advantage of.

“Therefore, lowering ATM withdrawal limits at night is a precautious measure not only for banks but also for customers."

On the other hand, the leader of a commercial bank with a large customer base said he is concerned that the request is not really adequate, as people do not only use debit but also Visa cards for ATM transactions.

Lower withdrawal limits for night-time transactions may affect Visa cardholders who travel to countries with an opposite time zone to Vietnam’s, he told Tuoi Tre.

Le Tham Duong, dean of the finance department at the Ho Chi Minh City-based Banking University, spoke highly of the SBV’s request to cap late-night cash withdrawal, hailing it as a feasible temporary measure that the central bank can take to cool down the card fraud crisis.

“However, a better solution to card fraud in the long run is upgrading ATM technology,” Duong told Thanh Nien (Young People) newspaper.

In May, the National Payment Corporation of Vietnam (NAPAS) warned that Vietnam is fast becoming a hot spot for credit card fraud as magnetic stripe cards remain predominant in the country for low costs, as opposed to the smart cards that are safer and now used by financial institutions in most developed countries.

Magnetic stripe cards, or swipe cards, store information that are read by bank and payment machines on a black magnetic stripe on their back.

Chip cards, on the other hand, store data on integrated circuits protected by complex cryptographic algorithms, providing heightened security against fraud compared to the much simpler encryption method used with magnetic stripe cards.

NAPAS has so far issued an official standard for chip technology, along with a roadmap to transition the country’s consumers to smart card technology, but the process has been slow as yet.

Despite the advantages of chip cards, commercial banks in Vietnam have been hesitant to move forward with a State Bank of Vietnam request for a full transition due to concerns over high costs.

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